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A.M. Best Affirms Ratings of the Member Companies of Stewart Title Group

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A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit ratings (ICR) of “a-” for the member companies of Stewart Title Group (Stewart). A.M. Best also has affirmed the ICR of “bbb-” for the parent holding company, Stewart Information Services Corporation (Houston, TX) [NYSE: STC]. The outlook for all ratings remains stable. (See below for a detailed listing of the companies and ratings.)

The affirmation of the organization’s ratings is based on its favorable risk-adjusted capitalization and continued positive operating results, as evidenced by a solid growth in surplus and continued solid pre-tax earnings in 2014, following similar favorable results in 2013 and to a lesser extent in 2012, as well as its significant business profile as the fourth-largest writer of title insurance in the United States.

Stewart’s favorable risk-adjusted capitalization is evidenced by fairly moderate underwriting and premium leverage ratios. Statutory surplus on a reported basis rose by approximately 11% in 2014 compared with 2013, while the group’s premium leverage as of year-end 2014, as represented by net premium to surplus ratio, continued to trend lower for the second consecutive year. This was due partly to the aforementioned increase in surplus levels accompanied by a decline in net premium writings in 2014. This followed two years of growth in 2012 and 2013, which benefited from a strong rebound in housing markets after back-to-back declines in 2010 and 2011. Stewart’s solid underwriting and operating results in 2014 were helped by lower claims volume, as well as continued expense management efforts.

Specifically driving the positive operating performance trends in 2014, as in 2013 and 2012, was the continued improvement in Stewart’s loss experience from active agents, as losses incurred from agents cancelled in past years were sizeable. This favorable loss trend can be seen in a declining loss and loss adjustment expense incurred ratio since 2010. The expense ratio has also been generally trending favorably as a result of numerous expense initiatives undertaken in recent years.

While Stewart’s current ratings and outlook are not expected to change in the near term, future upward movement on the ratings will necessitate sustaining an improved operating trend while maintaining favorable risk-adjusted capitalization. Conversely, any deterioration in operating performance or risk-adjusted capitalization may result in negative pressure on the outlook and/or the current ratings.

The FSR has been affirmed at A- (Excellent) and the ICRs at “a-” for the following members of Stewart Title Group:

  • Stewart Title Guaranty Company
  • Stewart Title Insurance Company
  • Stewart Title Limited

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at

Key insurance criteria reports utilized include:

  • Analyzing Insurance Holding Company Liquidity
  • BCAR for Title Insurance Companies
  • Insurance Holding Company and Debt Ratings
  • Equity Credit for Hybrid Securities
  • Rating Members of Insurance Groups
  • Rating Title Insurance Companies
  • Risk Management and the Rating Process for Insurance Companies
  • Understanding Universal BCAR

This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit

Copyright (c) 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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